Remember when Nissan Zs and GT-Rs ruled the streets? Or when your local highway was filled with Big Altima Energy, and Tesla's biggest competition was the Leaf? Nissan used to be a powerhouse—a true player in the auto market that promised affordable car and loans for anybody who could sign on the dotted line. But just being accessible isn't enough, and now the brand is facing a bit of uncertainty for its future thanks to its checkered past.
Welcome back to Critical Materials, your daily roundup for all things EV and automotive tech. Today, we're chatting about Nissan's troubled trajectory, the EV tax credit's newest milestone, and the EU readying the final vote on EV tariffs. Let's jump in.
30%: Nissan Is In Trouble
Nissan has found itself in a tough spot. Once a pioneer in the EV space with a big bet on its adorable little Leaf, the company is now struggling for relevancy in a post-Carlos Ghosn era, and folks, things aren't looking good.
Let's talk cold, hard cash first. It turns out that Nissan is making less of it. A lot less. Bloomberg reports that year-over-year, the average Nissan dealership in the U.S. earned a whopping 70% less than it did in the first half of 2023. That figure shouldn't come at too much of a surprise considering that the brand's profits dropped by 99% in the first quarter alone.
So what exactly is going on in Nissan's house that is absolutely annihilating sales? That's complicated.
In the U.S., hybrid sales are crushing it right now. Many consumers aren't ready to go full-scale EV, so brands like Toyota and Honda are capitalizing on the ability to offer consumers the stepping stone that is a hybrid powertrain in its sedans and SUVs. Nissan? Nada.
What makes this even more frustrating is that Nissan already has the tech in its arsenal. In its home market, the company's e-Power hybrids are selling quite well. The problem is Nissan has, for some reason, not brought the powertrain from Japan to the U.S. market yet. The brand has slated a tentative release of vehicles with e-Power systems by 2026, which is when it also plans to refresh about 78% of its lineup.
The brand has instead chosen to jump head-first into electrification, except it only offers two: the aged Leaf and the decent-but-not-top-tier Ariya. Unfortunately for Nissan, sales of both aren't that great.
That being said, the U.S. market is already tough as nails with high interest rates and rising vehicle prices. Can Nissan hold out another two years without drastically shifting its approach?
This isn't just a U.S. problem either. See, half of Nissan's global volume comes from the U.S. and China, and sales aren't doing good in either. In China, sales have slipped around 24%—not nearly as much as the States, but still concerning since it makes up a huge chunk of Nissan's revenue.
The brand's once-notable reputation is steadily deteroriating in China as more domestic players have made the market absolutely cutthroat. Local players like BYD and Nio are absolutely dominating right now, and even newcomers like Xiaomi are eating up space that could be otherwise occupied by Nissan. But with a lack of competitive, affordable EVs in its lineup, the brand is falling even further behind.
Nissan has found itself at a crossroads. China is demanding EVs and U.S. consumers want hybrids (until the market shifts more towards electrification, that is). The automaker is banking on its next-gen products to turn things around, but it's still an uphill battle for an automaker that has gotten away with being stagnant for so long.
The biggest unknown at play is whether or not Nissan can catch up before getting left in the dust for good.
60%: The U.S. Has Doubled 2024's EV Tax Credit Spending in Just 4 Months
The EV tax credit has been a lifeline for car buyers otherwise ruling EV out over their price. And with the change in the EV tax credit this year, well, it's put battery-powered cars on the map for a lot of folks.
No, seriously, there's been some major spending on EV tax credits this year for buyers picking up a new BEV. Just how much, you ask? Try a whopping $2 billion since January 1st.
According to new data from the U.S. Treasury, the U.S. has doubled the amount of money spent on these credits in just four short months. That amounts to hundreds of thousands of new car buyers discounting their battery-powered cars anywhere from $3,750 to $7,500 (depending on the vehicle and the buyer's income).
The idea is simple: show up at a dealer, pick out a qualifying car, and shave some bucks off the top. It's not like the EV market is swimming in affordable new cars though—the average price of a new EV earlier this year was right around $55,000 (22% more than the average transaction price of a new car during the same time, according to NADA). Couple that with an average auto loan interest rate of nearly 7%, and a $7,500 slash off the top could mean the difference between a $810 monthly payment and a $935 one. Both are still pricey, but, hey—at least it's taking the edge off.
Here's the kicker: $2 billion sounds like a lot for the EV market. It is. It's a big win. However, it doesn't solve critical underlying problems of EV adoption like the EV charging infrastructure. That's propped up instead by additional taxpayer funding courtesy of the Inflation Reduction Act.
Automakers are also unsure of what to take away from this. With a cooling market, many are backing off of their previous all-electric fleet targets, and others are vowing to be "led by their clients" or instead take a "multipathway" approach to electrification. And as politicians vow to do away with the EV tax credit, manufacturers are slowing their roll. Will that cause a bottleneck if demand picks back up next year as expected?
The upshot here is that $2 billion is a lot of money, but it's done a lot of good for EV adoption. But until buyers in more rural markets can lower their fears over panics like charging anxiety and upfront costs become parallel with gas-powered cars, the EV market will continue to hit growth stunts along the way.
90%: Europe Reportedly Has Enough Support To Move Forward With Chinese EV Tariffs
The writing on the wall has been there for some time, but tomorrow some long-awaited action will finally happen: the European Union will vote on whether or not to adopt massive tariffs on Chinese-built EVs. And despite some automakers clashing with EU officials over the potential repercussions of some heavy-handed levies, things are looking south for China and the domestic automakers that utilize the country's manufacturing for their own cars.
If the EU votes to enact the tariffs—and reports are now coming in that the EU believes it has secured enough votes for it to do so—affected companies could face duty fees of up to 45% on newly-imported EVs built in China.
From Reuters:
The European Commission, which is conducting an anti-subsidy investigation into EVs made in China, has put its proposal for final tariffs to the EU's 27 member states for a vote expected on Friday.
The support is a significant boost for Brussels as it pursues one of its largest trade cases ever. It remains unclear how the region's top economy and major car producer, Germany, will vote.
Under EU rules, the Commission can impose the tariffs for the next five years unless a qualified majority of 15 EU countries representing 65% of the EU's population votes against the plan.
France, Greece, Italy and Poland will vote in favour, officials and sources in those countries told Reuters. Together, they represent 39% of the EU population.
In case you didn't think this was already an issue for Europe, the European Commission has put out some numbers backing up its efforts. In 2020, China-built EVs represented just 3.5% of the entire EU market. By the end of the second quarter in 2024, that number had risen to 27.2% across all automakers.
China has previously denied rumors that it had a production overcapacity issue, some automakers calling the notion a "fake concept." The Commission's report tells another story. In fact, reports accuse China of having excess production capacity of 3 million EVs annually—to be clear, that means vehicles that would need to be exported because it exceeds the demand of the domestic market (which is already extremely strong).
Other countries have already levied protectionist tariffs against China. The U.S. is going above and beyond exempting vehicles with Chinese-sourced batteries from the $7,500 EV tax credit—there's also a 100% tariff slapped on any EV built in China. Canada followed suit shortly after with similar tariffs.
100%: What's Going To Save Nissan?
Nissan was one of my first crushes. I dreamed of owning a 240SX as a kid, and when I made that dream happen, I was ecstatic. Dream bigger, what about a GT-R? Well, the current offerings are cool and all, but something in me drew my attention back to the R32, R33, and R34 platforms (like most enthusiasts out there.) Then the Z car. I think the new Z is great, but with a ton of overlap compared to previous generations—almost akin to being a parts bin car—it didn't seem worth the markup dealers are asking.
So what the heck happened?
Enthusiast focus aside, Nissan has always made some pretty good offerings for the regular person. Plenty of sedans, some crossovers and lots of things in between. But things just feel... stale. And its sales numbers have clearly reflected that. Nissan needs a win.
Where that win is, however, is something that's only between former exec Carlos Ghosn and the wind, apparently. That's why I'm tapping you, dear reader, in as pretend CEO of Nissan. What path would you put Nissan on today to make it have a better tomorrow? Let me know in the comments.
